TABELL'S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 …. – – May 1, 1992 The Ne\!YO!iimesJ in its market story on WedItesday, tookJt upon itself to pronounce the demise of the small-stock market (and found itself subject to the usuarpuiidit's embariassmenl wheiitheOTCrFdustrirunose twelve-points iliat a&Yr—Diliiy-m.rlCetSiOries – -.. must, by necessity, focus on the short term, ana it is indeed a fact that most OTC indices posted new lows for the year early this week, attaining levels not seen since last December. It is also true that the average holder of smaIler stocks over the psst, say, eighteen months, hss, even at today's prices, probably done rather well. The tables at left, while containing a lot of numbers, do, still, manage to afford some perspective as to the action of the NASDAQ Industrials vs. the DJlA and the S & p in recent markets. START DATE AVG OCT 1987 1738.74 JUL 1990 2999.73 OCT 1990 2365.10 DEC 1990 2637.13 JAN 1991 2470.30 APR 1991 3004.46 OCT 1991 3077.15 OEC 1991 2863.82 JAN 1992 3264.98 APR LOll 3181.35 . APR 29th 333318 DOW JONES INDUSTRIALS Percent Change To JUL OCT DEC JAN APR OCT DEC JAN APR 1990 1990 1990 1991 1991 1221 1991 1992 LOll 73 36 52 42 73 77 65 88 83 – — -21 -12 -18 0 3 -5 9 6 12 4 27 30 21 38 35 – — —– — — —- – – — – -6 14 17 9 24 21 —– – 2-2 — – 25 16 32 —2 – -5 —-7 9 6 1-4 – — 29 6 3 11 —3 APR 29TH 92 11 41 26 35 11 8 16 2 -5 The tables show, for the three averages, the percentsge changes between various key market dates since 1987. The starting date for each period is read down the rows and the ending date across the columns. Thus, between the 1987 bear- market bottom and Isst Wedoesday, the Dow Jones Industrials were up by some 92, from 1738.74 to 3333.18. The S & p 500 wss ahead by 83 , and the NASDAQ Industrials were the leader, but only modestly, among the trio, ahead by some 114. STANDARD AND POORS 500 Percent Change To Better performance by smaIler stocks, then, was a phenomenon that JUL OCT DEC JAN APR OCT DEC JAN APR APR began later in the bull market, in mid- START OATE AVG 1990 1990 1990 1991 1991 1991 1991 1992 LOll 29th cycle in October, 1990. The OTC Index OCT 1987 224.84 64 31 48 39 74 77 67 UL-368.95.,.—20—-.-10–J6682 -ocf 1990 295.46 – 12 5 32 35 27 87 73 83 e V . – -7- – , . . 1 2 . . , – – . — 42 34 39 dropped off a good deal more than the Olher tWo iii'the'Jiily'OCfOlier, 1990tieli! – -OEC 1990 331.73 – -6 18 20 13 27 19 24 market, but recovered more sharply, – – -JAN 1991 311.49 – 25 28 20 35 27 32 18 vs. 12 on the initial leg of the – – – -APR 1991 390.45 – 2 -4 8 1 6 upswing. Then, in the first eleven – – – – – -OCT 1991 397.41 '.-6 6 -1 4 – -DEC 1991 373.22 – – – – – 12 5 10 – – – -JAN 1992 420.77 – – – – -6 -2 months of 1991 the smaIler-stock index rocketed ahead by 83 vs. 30-35 for – – – – – -APR LOll 394.50 – — 4 the Dow and the S & P. 1991, indeed, – – -APR 29th 412.02 – – – – – – – wss the year of the over-the-counter stock. Start Date AVG OCT 1987 28830 JUL 1990 51060 OCT 1990 34410 OEC 1990 40610 JAN 1991 387.50 APR 1991 57370 OCT 1991 629.80 OEC 1991 586.20 JAN 1992 741.90 APR LOll 605.10 APR 29th 617.50 NASDACI INDUSTRiAlS Percent Change To JUL OCT OEC JAN APR OCT OEC JAN APR 1990 1990 1990 1991 1991 1991 1991 1992 LOll -77 19 41 34 100 118 103 157 110 -33 -20 -24 13 23 15 45 19 – — – 18 13 67 83 70 116 76 – -5 42 55 44 83 49 — – — – – — – — — — – — – — – 49 63 51 91 56 – 9 2 29 5 — -7 18 -4 – — – — — — 27 3 – –18 — APR 29th 114 21 79 52 59 7 -2 5 -17 -2 Between the November- December 1991 low and February of this year the NASDAQ issues continued to outperform. putting on a 27 rise, better than both the senior averages. At that point, however, a distinct shift in leadership took place. The.S & P peaked in January 1992 aod hss not been able to regain that peak. Likewise, the OTC Index reached its high in February. Interestingly, breadth indicators also reached their highs in mid-February and have been lagging ever since. The Dow. however, went on to a new high in mid-March and wss thus only 3 under its January peak at the low of Isst month. It is-also, therefore, close to an all-time high. The S& P underperformed the Dow on the January-April !ownswing. and the NASPAQ I, '- -Industri.us completely reversed theiifield. dropping off 18 in February-April duriog what was essentially a sideways performance by the other two averages. There is, therefore, no simple answer to the question of how secondary stocks have performed. Ovtr the long term, taking the current cycle ss a whole, they have been average performers. Over the intermediate term, approximately the last year, their action has been stellar. And over the short term-the past couple of months. they have undergone a serious correction. All this fits in, however, with the basic thesis regarding smaIler stocks which we have voiced in this space since early 1991- when secondary stock indices such the NASDAQ, Value Une aod Wilshire 5000 first began poking up their heada. That thesis is that, having unperfonned the market since 1983, those stocks, on a relative basis, are now rebasing. This process, by definition, requires a number of wide swings both up and down. The 1991 surge and the recent weakness can both be viewed as part of this process, one that could ultimately lead to another six to eight-year upswing the the relative streogth of smaIler stocks. ANTHONY W. TABElL, CMT Dow Jones Industrials (1200) 3354.87 DELAFIELD, HARVEY, TABElL Staodard & Poors 500 (1200) 413.90 Cumulative Index (4/30/92) 7304.88 No statement or expression of opinion or any other matter herein contained IS, or IS to be deemed \0 be, directly or indirectly, an offer or the soliCitation of an offer to buy or sell any security referred to or men\loned The matter IS presented merely for the convenience of the subSCriber While we believe the sources 01 our Inlormallon to be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements made herein Any action to be taken by the subscnber should be based on hiS own investigation and Informallon Delafield, Harvey, Tabellinc as a corporation and s officers or employees may now have, or may later take, pOSitions or trades In respect to any securities mentioned In thiS or any lulure Issue, and such pOSition may be different from any views now or hereafter expressed In Ihls or any other Issue Oelalreld, Harvey, Tabellinc , which IS registered With the SEC as an Investment adVISor, may give adVice to 115 Investment adVISOry and othE!r customers Independently of any statements made In thiS or In any 01her 1ssue Further Information on any security mentioned herein IS available on request

TABELL'S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209. MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 May 8, 1992 The stock market is, as we know, a contrary beast, and it is seldom posslble to make definitIve statements about It. One of the few occasions on which one can -do-so is when-it attaiils-a-newhigh-after-a-prottacted nse (or a- new low-after a fall.) At that point it '- can be noted with certainty that a bull (or bear) market exists. The high or low in question may of course be the final one of the market swing, but, as of the day the benchmark is attained, it can be firmly asserted that a given trend remains in effect. Such was the case on Monday of this week when the Dow limshed at 3378,13, the highest close in its history, If one is enamored of intra-iay, rather than closing, figures, he could have made a similar statement on Wednesday, when that particular statistic set a new record at 3398.70. In any case, as measured by the Dow at least, we remained in a bull market as of this week. It is indeed possible to qUIbble about some aspects of this bappy state of affairs. Followers of the S & P 500 WIll note that the new-high award cannot be given to that particular average. Its close of 416.91 on Monday remained marginally below the 417.13 closing figure posted back on February 12th. The intra-day high of 418.53 achieved on Wednesday, moreover, failed to equal the like peak of 421 18, attained back on January 15th. In addition, as we noted last week, the action of secondary stocks has been abysmal. Even after a forty-pomt rally, the NASDAQ Industrials remain 13 under their February high. Even more disappninting has been the action of market breadth. The onset of the current UpSWIng last Chnstmas saw seven consecutive days with more than 1000 advancing issues, one showing over 1400 advances, one over 1300 and three over 1200. There have been only four days with more than 1200 advances since, three of them in early April, and 1000-1100 advances have of late been more common on good days. On a more quantitative basis, our daily breadth index remained. on Wednesday, SIX points below its bigh. Considering the fact that a two-point upmove in this indicator constitutes an extreme good day, it remains well away from an upSide confirmation. Signs of a loss of momentum are, therefore, present, but the bull market, by the definition noted above, remams mtacL That definition, however, the reader will have noted, IS a truism. What would be truly useful to know, of course, is how close, in time or extent, that bull market is to its ultimate end. Paradoxically, the answer to that question lies in how one chooses to answer yet another trurtquestion—when did the bull market begin This is an issue on which there is room for debate, even with advantage of over four years of -hindsighL Yet th';- o-u; of deba is, -;;.. tbhl,;;Wi;'.C'– – – – – — . – – ' – — — — – Let us explore the question a bit further then. It is obvious that! bull market began in the fall of 1987. Monday, October 19th, 1987 is a date which will forever have a place in the annals of financial history. (We prefer the record the actual bottom as having occurred in December when the S & P reached Its low, but the argument is academic.) Subsequently the Dow remained irregular through 1988, spent 1989 forgmg ahead to a new all-time !ugh in October of that year, and after some further Irregularity, contmued to just under 3000 in July, 1990 Using monthly average prices, the DnA was ahead at that point by some 54 There then occurred a setback–a short and sharp one. It was over in three months, but, in its course, the Dow dropped off by a bIt more than 20 on a closing basis and the S & P Composite by just under that figure. A twenty-percent decline has, in the past. been the rule-of-thumb criterion for identifying a bear markeL Was the break of July-October 1990 a full-grown bear, or was It simply an mtermediate-term correction' The answer is important. If Summer-Fall 1990 was merely an intermediate correction we are now looking at an upswing that is 52 months old. The average length over the entire 20th century for all full cycles, measured low to low, IS 45 months. The present elapsed duration is now approaching the length of the two longest bull markets in history–61 months in July 1982-August 1987 and 74 months in 1923-1929. In terms of amplitude, the market cannot be said to have advanced all that far, but its average-price rise, 72. is in the area of the century's average (81 ). If. however, a new bull market began in October, 1990, we are presented with an entirely different picture. That bull market is only 18 months old, far less than any recorded upswing since June, 1949. The range of bull-market durations since then has been 21-61 months, with an average of 36 months. The rise has been 33 so far-a number at the extreme short end of the range of this century's major bull markets and one which would suggest a good deal of further room on the upside. The question of what sort of bull market we are talking about, one that began m the fall of 1987 or one than commenced in October, 1990, is, therefore of critical importance. The primary argument against the optimistic view IS the minuscule length Gust 3 months or 61 trading days on a daily basis) of the putative 1990 bear market. On the other hand, as noted above, we are certamly stretchIng historical precedent by continumg to call everything that has taken place since 1987 a full, uncorrected upswmg. The fact that convmcing arguments can be presented on both sides makes looking at the present market in cycle terms a difficult exercise. In practical terms, though, we cannot use th.ts obscunty as an excuse to bury our heads in the sand. ThIs is especially true if we are entering an era of short and sudden bear markets, and 1987 (also 1990 if it was a bear market) fits this description. We can only continue to watch present action closely–especially trackmg the loss of momentum which seems to have recently mamfested itself as noted above. ThIs IS our responsibility as investment managers. As market historians we will eventually have the opportunity to fit the pieces into an overall cycle pattern. but not, it would appear, until a somewhat later date. AN1HONY W. TABELL, CMT DELARELD,HARVEY.TABELL Dow Jones Industrials (1200) 3367.40 Standard & Poors 500 (1200) 415.96 Cumulative Index (517/92) 739505 No statement or expression of oplmon or any other matter herein contained IS, or IS to be deemed to be, directly or Indirectly, an offer or the soliCitation of an offer to buy or sell any security referred to or mentioned The mailer IS presented merely for the convemence of the subSCriber While we believe the sources of our Information to be reliable, we In no way represent or guarantee the accuracy thereof nor of the statements made herem Any acllon to be taken by the subscriber should be based on hiS own investigation and InformallOn Delafield, Harvey, Tabelllnc, as a corporalion and ItS officers or employees, may now have, or may later take, posllIOns or trades In respect to any securities mentioned In thiS or any future Issue, and such poslliOn may be different from any views now or hereafter expressed In thiS or any other ISSue Delafield, Harvey, Tabell tnc, which IS registered With the SEC as an Investment adVisor may give adVice to Its Investment advISOry and other customers Independently of any statements made In thiS or In any oher Issue Further information on any security menlloned herein IS available on request

TAaELLS MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS. INC (609) 987-2300 May 15, 1992 Long-time (especially Ym-Iong-time) readers of this piece will recall that a few special things take place in – Presidential election years7wlfiCll;- of-couise7is the-casif(lrI9920ife SUCbevent is oilr annual effort to predlCftliewinner of the election for which exercise we are able to claim a record of 100 accuracy which, we regularly assure readers, is a great deal better than our record at forecasting the stock market. That effort, however, will be reserved, as usual, for November. We have also attempted, in a number of letters in the past, to make the more practical assessment of what the stock market was saying about the election and what election years in general have tended to tell us about the prospects for the stock market. Our first effort in this quadrennial exercise appeared a bit earlier this time around than is normally the case. Back on November 15th, we set forth our usual table detailing the stock-market history of each election year since 1900 and duly arrived at the conclusions that this study tends to produce. One of these conclusions was that there was a tendency for election years to have a flat or downward bias during their first half. Despite the recent surges to new highs for the Dow Jones Industrials, we think that flat is an adjective that can properly be used to describe the 1992 stock market thus far. We conducted the November study by looking at the average price for each month in election years, expressed as a percentage of the previous year's close, using the Standard & Poors 500 as a benchmark. The 500 closed 1991 at 417.09, and its average price for the month of April was 407.40, or 97.68 of the 1991 close. This, as we shall see in a moment, may in fact have some significance. Just as the market has been flat, the recent absence of competition on the political scene has made that area dull. It is all but certain that President Bush and Governor Clinton will be the major-party candidates in November. In a news- starved media, much has been made of the candidacy of H. Ross Perot. Those (like stock-market technicians) who are accustomed to look at the historical record will recall the names of Henry and George Wallace and John Anderson and remain.somewhat.underwhelmed. . Insofar as the relationship of the stock market to election year outcomes is concerned, action so far cannot be said to be encouraging to President Bush. There have been nine election years in this century when the average April price was lower or about the same as that of the previous year end. Those years were 1916, 1920, 1932, 1940, 1952, 1960, 1968, 1980, and 1984. In seven of the nine cases the decline was modest, as was the case this year, under five percent. It was seven percent in 1960, and in only one year, 1932, did a large drop take place. What is interesting about these nine years, however, is that six of them saw the replacement of the incumbent Presidential party. Thus, Wilson was replaced by Harding in 1920, Hoover by Roosevelt in 1932, Truman by Eisenhower in 1952, Eisenhower by Kennedy in 1960, Johnson by Nixon in 1968, and Carter by Reagan in 1980. The three exceptions were the reelections of Wtlson in 1916, Roosevelt in 1940, and Reagan in 1984. Taking the reverse view, of the eight occasions during the century when the party controlling the White House changed, six saw flat-to-Iower stock markets in April. The two exceptions to this rule occurred when Taft was replaced by Wilson in 1912 and when Ford was replaced by Carter in 1976. That particular year constitutes an exceptional one in a number of ways since it produced the strongest rally in the first four months of any of the 23 election years under study. We have, of course, long noted the fact that, regardless of the party winning the election, there exists a fairly strong tendency toward a strong second half. As we pointed out in November, in nineteen of the 23 election years we surveyed, the average price for December was higher than the average price for June. Likewise the December average price was higher or the same as the April average in eighteen years out of the 23. In seven of the nine years in which the market was lower in Apnl, it had recovered significantly by year end. In only two cases did the market continue down from its April low figure, in 1920 and 1940. Even in the exceptional years when the market trended lower in the second half, the decline was not very severe. The only instance of notable second-half weakness in any of the 23 years under study took place in 1920 (the election of Harding) when the average December price was 20 lower than that for April. We have been not1Og here of late the distinct signs of loss oftechnical momentum which have characterized 1992 so far. This loss of momentum has, of course, produced the fairly exceptional case of a market which has failed to advance 10 the initial four months of the year. The election year pattern for the market would seem to argue that the lost upside momentum might well be regained as we progress into 1992's second half. It WIll be interesting to see whether that pattern holds true or 1992 produces one of the rare exceptions. ANTHONY W. TABELL, CMT DELAFlliLD, HARVEY, TABELL Dow Jones Industrials (1200) 3355.42 Standard & Poors 500 (1200) 411.43 CumulatIve Index (5114/92) 7395.61 No statement or expression of opInion or any other matter herein contained IS or IS to be deemed to be, dlrecUy or Indirectly, an ofter or the sollcltallOn 01 an offer to buy Of sell any security referred to or mentIOned The matter IS presented merely for the convenience of the subscnber While we beheve the sources of our Information \0 be rehable we In no way represent or guarantee the accuracy thereof nor of the statements made herein Any actIOn to be laken by the subscnber should be based on hiS own Investigation and Informallon Oelafleld, Harvey, Tabell Inc , as a corporation and Its officers or employees, may now have or may laler take, posrtlons or trades In respect to any seCUrities menlloned In thiS or any future Issue and such poSition may be different from any views now or hereafter expressed m thiS or any other Issue Delafield, Harvey, Tabellinc , which IS registered With the SEC as an mvestment adVisor, may give adVice to tts Investment adVISOry and other customers mdependentlv 01 any statements made In Ihls or In any other Issue Further Information on any security menlloned herem IS available on request

TABELL'S MARKET LETTER 5 VAUGHN DRIVE, CN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 May 22, 1992 We find ourselves, It would seem, in an unusual equity market, one beset by cross currents and tom by conflicting forces. In terms of the Dow. yet another new-high was achieved on Tuesday-with a close-at 3397 .99…..-The 'found-number phenomenon has once ….. again appeared, and the Average, for the past couple of weeks, has engaged in a flirtation with the 3400 level, exceedIng that number on an intra-day basis and on a few ticks but not, so far, managing to close there. The Dow's performance, as we and just about every other market commentator on the face of the earth have pointed out, blatantly overstates the bullish case. The S & P 500 did, admittedly, when it reached 418.49 on May 11th, manage to post a new three-month peak. That peak, however, was still below the broader index's 1992 hIgh, achieved back on January 15th at 420.77, at which time the Dow was 150 points under its IDld-week level. Moreover, the S & P has gone back, in the past few days, to underperforming, failing, this week, to better its mid-May high. Almost any measurement one cares to look at suggests the narrowness of present leadership. Not since February has the NYSE been able to produce over 100 daily new hIghS, despite repeated new thrusts by the DRA. Meanwhile a glance at the actual names compnsmg the new-high list suggests an even more dismal picture. Of the 72 new highs posted on Wednesday, 31, or almost half, were Preferreds. an indicatIon. perhaps, of higher bond prices rather than a strong stock market Optirrusts, of course, can point to what can now be acknowledged as an earnmgs recovery We would certainly agree than such a recovery is underway, although its vitality is suspect and probably will remain so, at least until second-quarter earnings make their appearance. Current levels of valuation, though, certainly allow for almost any recovery prospects remotely in sight. It IS arguable that, to use an old clIche, present prices are discounting not only the future but the hereafter. And yet, withal, the market continues to maintam its current levels, making new peaks on the Dow and at least remaining in Sight of those peaks in terms of the broader indicators. Meanwhile, none of the technical negatives cited above should be, by thIs time, unexpected news. The hme is long gone when there were only a few of us labonng 10 the technical vineyard. and the basic concepts of market breadth and leadership are WIdely understood throughout the investment community. Widely heralded signs of technical weakness have, thus far at least, failed to dissuade most buyers of equities. The same is true of valuation factors. It seems to us now to be common knowledge that present levels of pie ratios and yields have, Just about invariably, led in the past to stock-market difficulties—indeed for the most part to major bear markets. Yet we have seen inJust the past t-wo days new highs on- the D-ow Billions of Dollars — 'JIlDoo ….. -'–. There is an old saying that II money makes the mare go , and this IS equally true of the stock market, now perhaps Sales Net Sales Total Assets Cash RatiO as much as ever before. What has kept prices at their current levels, it seems clear to us, is a monster mflux of new nvestment funds. One source of such funds is ObVlOus—equlty AVG 1986 4.819 2.602 148.174 9.67 mutual funds. The table at left shows the average monthly level of Dew sales, sales minus redemptions. total assets and cash AVG 1987 5.974 2.660 205.883 966 ratio for such funds for each year from 1986 to 1991 along with indivldual figures for the first three months of 1992 and average AVG 1988 2.553 0.328 191.579 1031 for the year so far. Note that new sales in 1992 have so far AVG 1989 4.464 1.259 226.768 9.75 been close to three times their level of 1986-7 and almost twice that 0 f 1991. In tenns of net cash Inflow, sales minus AVG 1990 6.013 2.153 246.795 11.81 redemptions. the increase in recent years IS even more startling. Net'Inflow for 1992 so far remams 2-3 times what it had been AVG 1991 8.078 3.595 309.732 9.22 in any year since 1986. On average. a net of some 7 billion a JAN 1992 13.484 7.248 375022 7.92 month has been pounng into eqUIty funds since the beginmng of theyear. FEB 1992 11 373 6.555 387.076 7.99 There exist, meanwhile, other sources of fuel for the market fire which. although less measurable. may even dwarf MAR 1992 15.448 7.914 383.557 8.60 mutual funds in magnitude. A pomter to one of those sources may perhaps. iromcally. be found In the anatomy of a recent AVG 1992 13.435 7.239 381.885 8.17 economic dIsaster, the Olympia & York bankruptcy, which may, along with the empty and half empty office building dotting the country, be taken as a symbol of the current sad state of the real estate market. The point IS, though. that those empty bUlldings were, over the past few years. the consumers of masSive amounts of Investment capital. Whatever one may thInk about the prospects for real estate recovery. 1t appears obvious that any growth In rentals over the next few years will go to filling existing vacancies not to new constructIOn. These dollars represent another aglomeration of funds which bas probably been finding, and may well contInue to find, ItS way into the equity market The future course of this new flow of funds IS of course unclear. How qUIckly could It dry up and thus. If alternative sources did not emerge. engender market weakness Or could the flow—along With econotnlc recovery–increase and thus continue to propel stock pnces to new high levels. We are dealing here. It seems to us. with a phenomenon of human behavior. and as always, technical work Will. we thInk. be helpful in deternuning the course of that behavioral phenomenon ANTHONY W TAB ELL, CMT Dow Jones Industnals (12 00) 3390 18 DELAFIELD. HARVEY. TABELL Siandard & Poors 500 (1200) 41456 Cumulative Index (5/21192) 7374.04 No statement or expression of opinion Of any other matter herein contained IS, or IS to be deemed 10 be, directly or indirectly, an offer or the solicltatton of an offerlo buy or sell any security referred to or menlloned The matter IS presented merely for Ihe convenience of Ihe subSCriber While we believe the sources of our information 10 be reliable, we In no way represent or guaranlee Ihe accuracy Ihereof nor of the slatements made herein Any actlon to be taken by the subSCriber should be based on hiS own Invesllgallon and Information Delafield. Harvey. Tabelt Inc. as a corporation and ItS officers or employees. may now have, or may later take. posrtlons or trades In respect to any secuntles mentioned m thiS or any luture Issue. and such poSition may be dlfferenl from any views now or hereafter expressed In thiS or any other Issue Delafield. Harvey, Tabellinc . which IS registered With the SEC as an Investment adVIsor. may give adVice to Its Investment adVISOry and other customers Independently of any statements made In thiS or In any other Issue FUl1her Information on any security menlloned herein IS available On request

TABELL'S MARKET LETTER 5 VAUGHN DRIVE, eN 5209, PRINCETON, NEW JERSEY 08543-5209 MEMBER NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC (609) 987-2300 May 29, 1992 The frigid weather that has been affiictmg the Northeast all thiS week may well cause us to forget the fact that summer is -….. close at hand. The so-lIed .summer rally i, thereforeconce more a topIc-for discussion. Thus wereproduce below the customary table which appears annually in this space at this time of the year, covering 95 years of market history since the Dow was first computed in 1897. One MOnth Periods (1897-1992) ——– ———- ———— End Month Advances Declines Average Chg. ——— ——– ——– ————– January 61 34 1.12 February 47 48 -0.20 March 57 39 0.72 April 52 44 0.90 May 48 47 -0.19 June 49 46 0.62 July 59 36 1.50 August 63 31 1. 64 September 36 58 -1. 33 October 51 43 -0.10 November 56 38 0.67 December. 69 26 1.48 Two Month Periods, (1897-1992) — – – ——– – – ——.—– — Advances Declines Average Chg. ——– ——– ——- —— 62 33 2.62 55 40 0.93 47 49 0.44 57 39 1. 66 51 44 0.78 49 46 0.39 58 37 2.11 63 31 3.41 54 40 0.26 41 53 -1. 38 55 39 0.63 66 29 2.03 TOTAL 648 490 0.57 658 480 1.16 As the table indicates, of the 1138 months since 1897, 648—or 57— have been advancmg months, and 490—or 43—- haveshowed declines. Thus,.the normaLexpectatlOn fo,-any giv.enjnonth.wouldJle 52,53adyances and 39,40declines. SiE!ilar figures can be adduced for two-month periods. . From the data above, we have been able to extract four patterns of a seasonal nature which seem to be statistically sigmficant. The one showing the most significance is, oddly enough, the least known, that being the tendency toward a market decline in the month of September. Since 57 of all months since 1897 have been rising ones, the expectation would be a plurality of advances over declines. However, precisely the opposite IS the case for September which, in 94 years, has produced 58 declines and only 36 advances With an average drop for the month of 1.33 . The probability of such a pattern be10g due to random chance IS, standard statistical tests tell us, less than 1 in IOoo. The next most significant pattern has been the year-end rally, illustrated by 69 rismg Decembers m 95 years. Our readers know that we have pubhshed an annual comment on thiS phenomenon around December or January of each year. Another seasonal manifestation, which We have demonstrated based on data since 1926, has been the fact that the direction m which the market moves in November has appeared to be a moderately successful predictor of the market's direction for the follOWing year. We confess to knowing no reason whatsoever why this should be the case, but it is, nonetheless, so. Of the four seasonal phenomena, the least significant is the summer rally, which is due to be examined at this juncture. As the table shows, the 59 advances and 36 declines for July are marginally better than one would expect. August shows an even greater aberration. The percentage advances for July and August, along with that for the two-month period ending in August, are the largest figures 10 the table, although December-January performance is close. DespIte these figures, standard significance tests suggest that the summer rally IS a less reliable phenomenon than the others noted above. It has been even less reliable recently, especially in July. Despite the fact that 1982-1992 has. overall, been one of the better decades 10 stock-market history, half of the ten Julys since 1982 have been down months. For last year three of the four seasonal indicators remained true to form July, 1991 saw a better than loo-pOlOt rise lD the Dow. and August extended the rally September, as might have been expected, produced a mild decline. In addition, the 1991-92 year-end rally not only amved on schedule but remains intact, the Average. at its recent high, standing 18.65 above its December low WIthout an interverung correction of as much as 4. Only the forecast normally produced by the month of November has proved to be off base so far. November of last year saw a fairly sharp decline lD the DJIA, and as noted above, that mdlcator, If not the rest of the market, has rallied since then We stress once more that the summer rally is the least reliable of the seasonal tendencies we have been able to discover but there IS little doubt that summer action does have some tendency to be better than normal. That tendency must, this year, be coupled With the pattern of a strong second balf occumng in an electIon year. There are a number of reasons for skeptiCism regarding the current level of stock prices, but seasonal tendencies, it must be admitted, do not reenforce them. ANTHONY W. TABELL, CMT Dow Jones Industrials (1200) 3416.84 DELAFIELD, HARVEY, TABELL Standard & Poors 500 (12 00) 418.18 Cumulative Index (5/28/92) 7371.01 No statement or expressIon of opinion or any other matter herein contained IS, or IS to be deemed to be, directly or Indirectly. an offeror the soliCitation of an offerlO buyer sell any security referred to Or menl!Oned The matler IS presented merely for the convenience of the subSCriber While we beheve the sources of our Information to be reliable we In no way represent or guaranlee the accuracy thereof norof the statements made herem Any action to be taken by the subSCriber should be based on hiS own mvestlgallon and mformatlon Delafield, Harvey, Tabelllnc, as a corporation and Its officers or employees, may now have, or may later take, posrtlons or trades In respect to any securrtles mentioned In thiS or any future Issue, and such pOSitiOn may be different from any views now or hereafter expressed m thiS or any other Issue Delafield, Harvey, Tabell Inc, which IS registered With the SEC as an Investment adVISor, may give adVice to rts Investment adVISOry and o1her customers Independently of any statements made in thiS or in any other Issue Further Information on any security menlloned herein IS available on request